Intel announced a new low-power, task-specific chip for so-called microservers that are increasingly gaining favor in Web computing facilities to perform particular tasks such as file or database management. The “C2000,” chip, Intel said, which can run as low as 6 watts and has 64-bit memory addressing, is the first Intel chip to use the “Silvermont” processor core that Intel is also using for its “Atom” line of chips for mobile phones and tablets, in contrast to traditional power-hungry chips built around Intel’s “Core” microprocessor architecture for mainstream servers and desktops. Intel is going up against similar products from Advanced Micro Devices (AMD). As with AMD, Intel boasts the “system-on-a-chip” nature of the semiconductors, with customers being able to choose from a mix of functional blocks that, when combined, give the chip a distinct set if capabilities for different tasks.

Intel also unveiled chips that can be built into servers to conduct Ethernet networking, replacing dedicated switching hardware; and fiber-optic transceiver products to link server computers together for high-speed data transfer.

The response of bulls and bears was split in fairly stark fashion between those who believe Intel demonstrates substantial progress against AMD and the rest of the ARM Holdings (ARM) licensees, including Nvidia (NVDA), and those who believe Intel is running scared in the face of the ARM threat.

Doug Freedman of RBC Capital Markets reiterated an Outperform rating and a $29 price target on the shares, writing, “INTC’s new Atom low-power C2000, successor to S1200, is a very compelling offering in that it not only offers up to 6x performance/ watt (vs. S1200), but will enable newer markets leveraging prior SoC efforts in mobile (smartphone/tablet).

Thus INTC stands to pick-up ground in new markets with attractive ROI on more customized solutions [...] Performance vs. select S1200 parts are expected to be up to 7x faster, offering up to 6x higher performance per watt. The product is expected to be a best-in-class solution vs. competitive ARM solutions in the marketplace [...] We were encouraged to hear that the gross margin impact is expected to be “a wash”. To us, this implies that the margins are at least comparable to performance-based parts, and potentially better due to 22nm and cost efficiencies realized as a result of leveraging mobile resources.”

From the bear camp, Hans Mosesmann of Raymond James, reiterating an Underperform rating, wrote that “Intel introduced today an impressive number of Atom-based processor, switch, memory, and optical connectivity products/technologies for the datacenter in a move that highlights, in our view, Intel’s sense of urgency to defend its server processor supremacy.”

It is hard to fathom Intel making this big of a splash had ARM not released its 64-bit v8 architecture (for licensing) nearly two years ago with the subsequent strong design interest. Intel was at pains to explain that microservers, as a category, are small but the opportunity for adjacent markets is big. Translation: we are worried about the ARM threat and are willing to cannibalize existing low-end, highly profitable XEONs to make sure this does not happen.”

The Street seems to have been happy, however: Intel shares closed up 57 cents, or 2.6%, at $22.64.

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SEPTEMBER 5, 2013 12:06 A.M.

douglas wrote:

FCS > SELL
Fairchild Semiconductor International Inc.'s earnings have declined to an estimated $0.16 from $0.49 over the past 5 quarters; they have shown deceleration in quarterly growth rates when adjusted for the volatility of earnings. This is an indication of weakness that could lead to declining earnings.
FCS seems highly valued with the highest PEG value in the Semiconductors & Semiconductor Equipment industry of 104.3551, which is supported by a PE of 521.7755 that is also the highest in the industry.
The prior quarter Operating Margin of 1.50% is less than the TTM Operating Margin of 7.85%.
Balance Sheet Strength: n The Long-Term Debt/Capital is 15.57%. This indication of financial leverage measures the extent of a firm’s capital that is provided by lenders. Below 25% reflects well on a company’s financial stability. The average LT Debt/Capital for this Industry Group (Electr. Semi.) is 11.21%. Growth Potential: n The prior quarter EPS of $-0.06 is less than the EPS of the year over year quarter of $0.02. n The prior quarter EPS growth rate of -400.00% is smaller than the TTM EPS growth rate of -41.97%. n The TTM EPS growth rate of -41.97% is less than the TTM Sales Per Share (SPS) growth rate of -0.08%. n Earnings Trend is Negative for the last three quarters on a year over year basis. FCS is nothing but a SELL
Nothing new! Federal Reserve comity and Ben Bernanke “Giant Ponzi Scheme” .When we have bad economic data market is going up on speculation Fed Chairman Ben S. Bernanke will kip printing money. When we have god economic data market is going up speculation Bernanke is steel printing? This entire look like exuberance sign of market is in the crash mod and will burst 1000 down ward point any second. There is no exist without big consequences Bernanke know that and kip printing money we all American will go down to drain. Either way he will finish as slowly anyway. Bernanke ruin billions and billions of ordinary people’s lives with kipping interest zero in favor of Banks and Speculators Bernanke committed the biggest crime to humanity The Biggest Ponzi Scheme Ever. Bernanke is a Scam bag! Communist was using seam principals like Fed > Bernanke (printing money for ever), and day collapsed next is USA to Collapse, because off sociopath Bernanke. Printing money is poor pyramid scams, artificial unreal! Stock and everything is doom for crash. Every pyramid scam crash everybody loses regular investor watch out doesn’t fall in to the trap.
A record breaking stock market is distorting a frightening reality: The U.S. is being eaten alive by a horrific cancer that will ultimately destroy the economy and impoverish the vast majority of its citizens.
That's according to Peter Schiff, the best-selling author and CEO of Euro Pacific Capital, who delivered his harsh warning to investors in a recent interview on Fox Business.
"I think we are heading for a worse economic crisis than we had in 2007," Schiff said. "You're going to have a collapse in the dollar...a huge spike in interest rates... and our whole economy, which is built on the foundation of cheap money, is going to topple when you pull the rug out from under it."
Schiff says that, despite "phony" signs of an economic recovery, the cancer destroying America stems from a lethal concoction of our $16 trillion federal debt and the Fed's never ending money printing.
Currently, Bernanke and company is buying $1 trillion of Treasury and mortgage bonds a year. That's about $85 billion per month against a budget deficit that is about the same level.
According to Schiff, these numbers are unsustainable. And the Fed has no credible "exit strategy."
Eventually interest rates will rise... and when they do, Schiff says, stocks will tank and bonds dip to nothing. Massive new tax hikes will be imposed and programs and entitlements will be cut to the bone.

SEPTEMBER 5, 2013 12:36 P.M.

Daniel wrote:

The argument that it is "desperate" is ridiculous. Of course Intel iw wiling to defend its position on the server market. It would be foolish not do it. They beat the competition to the market now, and i dont see how ARM is really going to make a dent on that.

Intel is also gaining a good share of the tablet market, that is not anymore a myth, it is happening. So the "desperate" tone, sounds more like apublicity stun by an analyst whose customer bought too much ARM stock and i am trying to sell :)

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Tech Trader Daily is a blog on technology investing written by Barron’s veteran Tiernan Ray. The blog provides news, analysis and original reporting on events important to investors in software, hardware, the Internet, telecommunications and related fields. Comments and tips can be sent to: techtraderdaily@barrons.com.